Spectacularly Costly, Olympian, Fraud in Sochi

Just as Moscow has often used the Soviet role in World War II as a universal moral solvent to justify or at least distract attention from whatever the Russian government has done, now Moscow appears to be invoking the threat of terrorism to the 2014 Sochi Olympics in order to distract attention from massive corruption there.

As many commentators have pointed out over the last several years, Sochi is hardly an ideal place to hold the Olympics given its proximity to the unsettled North Caucasus and the anger of many ethnic groups in that region about Moscow’s decision to destroy ecological and historical sites dear to them in order to stage that competition. But if in the past, Moscow officials have repeatedly stressed their ability to ensure security at those games, now the head of the FSB is saying that there is a definite terrorist threat. And while Aleksandr Bortnikov’s statement last week is almost certainly true, the timing of his remarks highlights what Moscow appears most concerned about – covering up corruption.

That is because over the last several weeks ever more evidence has come out that, as one Russian news service headlined its report today, “corruption is making the Sochi Olympics the most expensive in history,” a charge that could have the effect of leading more people to question the appropriateness of holding the games there.

But by invoking the threat of terrorism, Bortnikov and presumably the powers that be behind him raise the stakes not only for the Russian Federation but for the international community by implying that any retreat about the Sochi Games would be a concession to the terrorists, something neither Russians nor Western governments are prepared to do.

Last Thursday, FSB director Aleksandr Bortnikov said that his agency has come into possession of information that “terrorists intend to blow up the Olympiad in Sochi in 2014,” the kind of threat that has already forced the cancellation of the Dakar 2008 rally and one that “exerts serious influence on political decisions. The FSB chief suggested that such attacks reflect a change in strategy and tactics by international terrorist structures. Now, he said, “they ever more actively use in their interests radicalism and extremism and seek to master the latest technologies and gain access to elements of weapons of mass destruction.” And Bortnikov added that “fellow travelling by and at times direct support of the terrorists from the side of particular political forces which are attempting to use them in their goals,” a charge that many analysts immediately saw as preparing the ground for more attacks on militants in the North Caucasus.

Drawing on reporting by “Nezavisimaya gazeta,” New Region’s Olga Panfilova says that the projected costs of the 2014 Sochi Games are ten times as large as those of past games, two and a half times the original plan, largely the result of poor planning and construction shortcomings, an unfortunate location, and massive corruption. Natalya Zubarevich, the director of regional programs at the Moscow Independent Institute of Social Policy, said that the extraordinarily high costs were the result of “ineffectiveness and corruption. We do not know how to build inexpensively and high quality objects. And,” she adds, “there is also corruption.”

Aleksey Skopin, deputy head of the regional economics department at the Moscow Higher School of Economics, was more negative. He suggested that of the 39 billion US dollars Moscow may allocate to Sochi, 30 billion of them will represent a kind of tax “which we in fact will pay to bureaucrats, criminals and all those who participate in the realization of the games.” According to Nezavisimaya Gazeta, Panfilova continues, “independent experts have not seen a real business plan for the conduct of the Olympic Games” in Sochi. As a result, it is impossible to know just where the money is coming from and where it is going, something that clearly works to the benefit of corrupt officials.
Indeed, the experts suggest, the rapid growth in spending on Sochi is a means that has been adopted by the powers that be to exclude society from any role in “the control over public finances,” a conclusion that if true makes the consequences of the Sochi Games already a major loss for Russia regardless of how many medals its athletes might eventually win.

Meanwhile, The New Times provides additional details about corruption in the Sochi project. In London’s “Sunday Times, Russian businessman Valery Morozov accused Vladimir Leshchevsky, an official of the Administration of Affairs of the Presidential Administration, of taking major bribes to approve Sochi construction. In his interview, which was picked up by Moscow’s “Novaya gazeta,” Morozov said that Leshchevsky had demanded a bribe equal to 12 percent of a 1.5 billion ruble (50 million US dollar) Sochi construction project, a bribe that Morozov says he paid but that Leshchevsky has denied receiving.

Leshchevsky is close to Prime Minister Vladimir Putin. In 2003, New Times notes, Putin awarded him the Order of Friendship” for his role in the celebration of the 300th anniversary of St. Petersburg and international summits, events which some observers earlier have suggested involved corruption as well.

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